693 F.

2d 290
3 Employee Benefits Ca 2321

REPUBLIC INDUSTRIES, INC., a Delaware Corporation, as

successor in interest to Johnson Motor Lines,
Inc., Appellant,
v.
CENTRAL PENNSYLVANIA TEAMSTERS PENSION
FUND.
No. 82-1251.

United States Court of Appeals,

Third Circuit.
Argued Sept. 30, 1982.
Decided Nov. 19, 1982.

David L. Steck, Rawle & Henderson, Philadelphia, Pa., for appellant;

Lester M. Bridgeman (argued), Louis T. Urbanczyk, Washington, D.C.,
Philip B. Kurland, John B. Coffey, III, Christopher G. Walsh, Jr.,
Rothschild, Barry & Myers, Chicago, Ill., of counsel.
Harry A. Dower (argued), Dower & Dunn, Allentown, Pa., for appellee;
Richard T. Muller, Bethlehem, Pa., of counsel.
Henry Rose, Gen. Counsel, Baruch A. Fellner (argued), Associate General
Counsel, J. Stephen Caflisch, Sp. Counsel, Peter H. Gould, Terence G.
Craig, David F. Power, Washington, D.C., for amicus curiae Pension
Benefit Guar. Corp.
Before ALDISERT and HIGGINBOTHAM, Circuit Judges, and
SAROKIN,* District Judge.
OPINION OF THE COURT
ALDISERT, Circuit Judge.

It is a "long settled rule of judicial administration that no one is entitled to

judicial relief for a supposed or threatened injury until the prescribed

administrative remedy has been exhausted." Myers v. Bethlehem Shipbuilding
Corp., 303 U.S. 41, 50-51, 58 S.Ct. 459, 463-64, 82 L.Ed. 638 (1938). The
question for decision in this appeal is whether the district court erred in
applying this rule when it refused to consider a challenge to the
constitutionality of the Multiemployer Pension Plan Amendments Act of 1980
because appellant had not exhausted the arbitration procedure mandated by the
Act. Appellant contends that the district court was wrong to compel arbitration
because the policy justifications which support the exhaustion doctrine would
not be furthered by postponing judicial review of its constitutional claims. We
agree and accordingly reverse the judgment of the district court.
I.
2

Appellant, Republic Industries, Inc., is the successor in interest to Johnson

Motor Lines, Inc., an employer who contributed to the Central Pennsylvania
Teamsters Pension Fund ("the Fund") until August 8, 1980 when it ceased its
business operations. On September 26, 1980, seven weeks after that corporate
dissolution, the President signed the Multiemployer Pension Plan Amendments
Act of 1980 (MPPAA), 29 U.S.C. Secs. 1381-1461 (1982) (amending the
Employer Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Secs.
1001-1381), which by its terms applies retroactively to April 28, 1980. Id. Sec.
1461(e)(2).

Because this case centers on the provisions of MPPAA, we must examine that
statute in detail. The Act provides that when a contributing employer withdraws
from a multiemployer pension fund, it must pay a withdrawal liability--an
allocated portion of the fund's unfunded vested benefit liability. 1 The duty to
compute and collect this liability falls upon the trustees and actuaries of the
fund. Id. Secs. 1382, 1391, 1393, 1399. The Act provides that disputes over the
amount of withdrawal liability shall be resolved through arbitration. Id. Sec.
1401(a)(1). At arbitration, the fund's determination of withdrawal liability is
presumed correct unless shown to be "unreasonable" or "clearly erroneous." Id.
Sec. 1401(a)(3)(A). If any party is dissatisfied with the outcome of arbitration,
it may bring an action in the district court either where the plan is administered
or where the defendant resides or does business. Id. Sec. 1451(d). If such action
is instituted, the arbitrator's findings of fact may be rebutted only by a
preponderance of the evidence. Id. Sec. 1401(b)(2), (c).

On November 18, 1981, in accordance with the Act, the Fund demanded
withdrawal liability from Johnson Motor Lines in the amount of $848,494,
payable on or before January 17, 1982. On January 12, 1982, Republic brought

an action in the district court below seeking to enjoin the Fund from imposing
such liability. Republic presented six constitutional challenges to MPPAA,
arguing that the Act violates the fifth amendment by (1) imposing retroactive
liability; (2) authorizing a prehearing seizure in the form of installment
payments which must be paid during arbitration; (3) delegating the
determination of liability to private actuaries who have no clear basis on which
to compute such an amount; (4) dictating its liability standards in especially
vague terms and imposing an excessive burden of proof on withdrawing
employers; and (5) authorizing a "taking" without just compensation, i.e., the
use of private funds to promote the public purpose of providing pension
benefits to workers. Further, Republic contended that the Act denies employers
the right to a jury trial for the resolution of their disputes in contravention of the
seventh amendment. Republic v. Central Pennsylvania Teamsters Pension
Fund, 534 F.Supp. 1340, 1343-44 (E.D.Pa.1982).
5

The district court dismissed the complaint for Republic's failure to exhaust the
administrative remedies mandated by MPPAA and accordingly denied its
request for injunctive relief. Republic appealed. Pension Benefit Guaranty
Corporation, a wholly-owned United States Government corporation created by
ERISA, 29 U.S.C. Sec. 1302(a), to enforce, inter alia, the withdrawal liability
provisions of MPPAA, filed an amicus brief.

II.
6

In considering Republic's primary contention--that the policy justifications for

requiring exhaustion are absent from this case--we must consider the purpose
of the "long settled rule ... that no one is entitled to judicial relief ... until the
prescribed administrative remedy has been exhausted." Myers, 303 U.S. at 5051, 58 S.Ct. at 463-64. The exhaustion doctrine is justified by three policy
concerns. First, adherence to the doctrine shows appropriate deference to
Congress' decision, embodied in statute, that an independent administrative
tribunal, and not the courts, should serve as the initial forum for dispute
resolution. Babcock & Wilcox Co. v. Marshall, 610 F.2d 1128, 1137 (3d
Cir.1979); American Federation of Government Employees v. Resor, 442 F.2d
993, 994 (3d Cir.1971). Were the courts to act prematurely, in disregard of this
statutory scheme, the doctrine of separation of powers would be undermined.
First Jersey Securities, Inc. v. Bergen, 605 F.2d 690, 695 n. 3 (3d Cir.1979)
(citing Resor, 442 F.2d at 994); K. Davis, Administrative Law of the Seventies
Secs. 20.01-20.08 (1976).

Second, the exhaustion doctrine illustrates respect for administrative autonomy

by forbidding unnecessary judicial interruption of the administrative process.

This autonomy allows the administrative tribunal to exercise its own discretion,
apply its own special expertise, and correct its own errors, thereby promoting
administrative responsibility and efficiency and minimizing the frequent and
deliberate flouting of administrative processes which could weaken the
tribunal's effectiveness.2 McKart v. United States, 395 U.S. 185, 194, 89 S.Ct.
1657, 1662, 23 L.Ed.2d 194 (1968); Bethlehem Steel Corp. v. EPA, 669 F.2d
903, 907 (3d Cir.1982); First Jersey, 605 F.2d at 695.
8

Third, the exhaustion requirement fosters judicial economy both by permitting

the administrative tribunal to vindicate a complaining party's rights in the
course of its proceedings, thereby obviating judicial intervention, and by
encouraging the tribunal to make findings of fact on which courts can later rely
in their decisionmaking. McKart, 395 U.S. at 194-95, 89 S.Ct. at 1662-63;
Bethlehem Steel, 669 F.2d at 907; Babcock, 610 F.2d at 1137; First Jersey, 605
F.2d at 695. These mooting and fact-finding functions may be particularly
important in the resolution of cases involving constitutional issues. If the
administrative tribunal decides a case on nonconstitutional grounds, the court
may find it unnecessary to proceed with constitutional adjudication. In this
way, exhaustion furthers the concept of judicial restraint: "constitutional issues
should not be decided and legislation should not be invalidated, if a controversy
may be resolved on some other ground." Babcock, 610 F.2d at 1137 (citing
Ashwander v. TVA, 297 U.S. 288, 347, 56 S.Ct. 466, 483, 80 L.Ed. 688 (1936)
(Brandeis, J., concurring)). In addition, even if the court must reach the
constitutional issues, the administrative tribunal will have developed the factual
matrix so vital to constitutional decisionmaking. Hodel v. Virginia Surface
Mining & Reclamation Association, 452 U.S. 264, 295-97, 101 S.Ct. 2352,
2370-71, 69 L.Ed.2d 1 (1981); Aircraft & Diesel Equipment Corp. v. Hirsch,
331 U.S. 752, 767, 67 S.Ct. 1493, 1500, 91 L.Ed. 1796 (1947); Babcock, 610
F.2d at 1137-38.

We have recognized three exceptions to the exhaustion doctrine: (1) when the
nonjudicial remedy is clearly shown to be inadequate to prevent irreparable
injury, Resor, 442 F.2d at 994-95; (2) when resort to the nonjudicial remedy
would "clearly and unambiguously violate statutory or constitutional rights,"
Bethlehem Steel, 669 F.2d at 907-10; Babcock, 610 F.2d at 1138-41; First
Jersey, 605 F.2d at 696-97; Barnes v. Chatterton, 515 F.2d 916, 921 (3d
Cir.1975); and (3) when exhaustion would be futile, United States ex rel.
Marrero v. Warden, Lewisburg Penitentiary, 483 F.2d 656, 659 (3d Cir.1973).

10

We also have ruled that these exceptions apply only in "extraordinary

circumstances," First Jersey, 605 F.2d at 696, when the remedy to be
exhausted, though supported by the underlying policy justifications of the

doctrine, should not be compelled because of some countervailing

consideration.
III.
11

The conventional approach would simply be an inquiry by the court as to

whether the exhaustion doctrine or an exception thereto is applicable. But
Republic has mounted an argument that raises threshold considerations that go
not so much to exceptions to the exhaustion doctrine but rather to conditions
precedent to its application. Republic argues, and we agree, that although the
exhaustion doctrine speaks only to the timing of judicial review and not to its
eventual application, the doctrine should not be invoked without analysis. It
"should be applied with a regard for the particular administrative scheme at
issue." Bethlehem Steel, 669 F.2d at 906 (quoting Weinberger v. Salfi, 422 U.S.
749, 765, 95 S.Ct. 2457, 2466, 45 L.Ed.2d 522 (1975)). If the statutory schema
mandates exhaustion of an administrative remedy, and if that remedy is
adequate in its furtherance of the policies behind the doctrine, then only in
extraordinary circumstances, when the complaining party satisfies one of the
narrow exceptions to the doctrine, should the courts excuse exhaustion. See
First Jersey, 605 F.2d at 696. A twofold inquiry thus becomes necessary:
whether arbitration under the statute is properly an administrative remedy, and,
if so, whether the remedy is adequate.

12

Republic contends that the district court erred in mandating exhaustion because
arbitration is not the type of administrative proceeding implicated by the
doctrine nor does it constitute an adequate administrative remedy. In effect, it
argues that because these prerequisites are absent, the doctrine itself is
inapplicable, and, therefore, the court below erred in reaching the question of
whether Republic satisfied an exception to the doctrine. We now examine this
contention.

A.
13

Because MPPAA explicitly mandates the initial resolution of withdrawal

liability disputes through arbitration, the first question is whether arbitration is
the type of administrative proceeding implicated by the exhaustion doctrine.
Republic argues that the doctrine is inapplicable because a private arbitrator is
not an "administrative agency" and is selected ad hoc for a single case, thereby
lacking any "administrative expertise" from which a court might benefit. We
disagree.

14

We have recently held that the nonjudicial processes of the National

Association of Securities Dealers, a private corporation empowered by

Congress to regulate its members, are subject to the exhaustion doctrine. See
First Jersey, 605 F.2d at 696. In First Jersey, we noted that "Congress preferred
self-regulation by a private body over direct involvement of a government
agency," id. at 698, and that ultimate judicial review was available if the
nonjudicial action failed to resolve constitutional or statutory complaints, id. at
696. Further, we credited Congress with the establishment of procedural
safeguards to prevent abuses of the system. Id. at 698. Thus, considerations of
sound "judicial administration," id. at 695, prompted us to respect the
congressional choice of primary decisionmaker.
15

We also indicated that such nonjudicial, nonagency procedures may be

appropriate in other contexts and that judicial respect should extend to them as
well: "To uphold [appellant's] contention would destroy the valuable
congressional scheme for self-regulation in the ... area and the destruction
could very well extend to other areas employing intramural controls. [The court
must respect] Congress's thoughtful view that self-regulation is the best firstline defense." Id. at 698.

16

We believe that the identical analysis applies here. Congress, in enacting

MPPAA, expressed a clear preference for self-regulation through arbitration, 29
U.S.C. Sec. 1401(a)(1); provided for judicial review in the event that
arbitration failed to resolve the controversy, id. Sec. 1401(b)(2); and established
an elaborate procedural framework to guide the arbitrator, id. Secs. 1381-1461.
Thus, in accordance with the exhaustion doctrine's policy of deference to
Congress, the legislature's decision that arbitration, and not the courts, is the
proper forum for the initial resolution of disputes should be respected.

17

Application of the exhaustion doctrine to arbitration proceedings also is

consistent with the other policies of the doctrine. The autonomy of the
arbitration process is promoted by forbidding the interruption of that tribunal's
proceedings until it has exercised its discretion and applied its expertise. In
addition, arbitration can further the goals of judicial economy and judicial
restraint either by resolving a complaining party's grievance, thereby mooting
an appeal concerning the constitutional issues at stake, or by making factual
findings that must precede appellate review. See Aircraft & Diesel Corp., 331
U.S. at 767, 67 S.Ct. at 1501; Ashwander, 297 U.S. at 347, 56 S.Ct. at 483
(Brandeis, J., concurring).

18

Because arbitration is consistent with the policies of the exhaustion doctrine,

appellant's related argument that the exhaustion doctrine should not apply
because the arbitrator is selected on an ad hoc basis and has no "administrative

expertise" from which a court might benefit, must also fail. Since MPPAA
allows the parties to select the arbitrator, it is unreasonable to assume that they
will select one ignorant of the relevant issues. Consequently, application of the
exhaustion doctrine to arbitration by an administrative tribunal is consistent
with our decisions and the policy justifications for the doctrine. The question
remains, however, whether arbitration is an adequate administrative remedy
within the facts of this case. We now address that inquiry.
B.
19

The exhaustion doctrine presupposes an adequate administrative remedy. See L.

Jafee, Administrative Law 426 (1965). No remedy is adequate if it fails to
satisfy the underlying policy justifications of the doctrine. See Cerro Metal
Products v. Marshall, 620 F.2d 964, 970-71 (3d Cir.1980). It is critical,
therefore, to determine whether compelling arbitration would further the goals
of deference to Congress, administrative autonomy, and judicial economy.

20

In considering whether the first two policy justifications for the exhaustion
doctrine would be met by compelling arbitration, it is important to determine
the nature of Republic's constitutional challenge. As Professor Kenneth Culp
Davis notes:

21

A fundamental distinction must be recognized between constitutional

applicability of legislation to particular facts and constitutionality of the
legislation. When a tribunal passes upon constitutional applicability, it is
carrying out the legislative intent, either express or implied or presumed. When
a tribunal passes upon constitutionality of the legislation, the question is
whether it shall take action which runs counter to the legislative intent. We
commit to administrative agencies the power to determine constitutional
applicability, but we do not commit to administrative agencies the power to
determine constitutionality of legislation.

22

3 K. Davis, Administrative Law Treatise Sec. 20.04, at 74 (1958).

23

The Fund and the amicus, Pension Benefit Guaranty Corporation, contend that
Republic mounts a challenge to the constitutionality of MPPAA as applied--a
proper matter to commit to arbitration. They argue that Republic freely
admitted as much during oral argument. We acknowledge this admission but do
not consider it controlling. We recognize that statements of counsel uttered
under the fire of oral argument, delivered in the heat of judicial interrogation,
cannot decide this important issue. Moreover, Republic's actual admission

during oral argument was that its contentions on appeal contained both "as
applied" and "facial" constitutional challenges.
24

We believe that a closer examination of Republic's constitutional claims reveals

a facial constitutional challenge. Republic does not specifically attack the
constitutional applicability of MPPAA's withdrawal liability provisions. It does,
however, launch a constitutional broadside on the whole statute, the entire
administrative structure, the basic fairness of MPPAA. We conclude, therefore,
that Republic's frontal assault on the entire statute constitutes a facial
constitutional challenge which supports the inapplicability of the exhaustion
doctrine.

25

To compel arbitration in the context of a facial challenge would promote neither

deference to Congress nor administrative autonomy. First, the legislature could
not have intended to defeat separation of powers principles by allowing an
administrative tribunal to review the constitutional validity of a statute--a
function reserved for the judiciary. It would be unconstitutional, therefore, to
compel the arbitrator to review the facial constitutionality of MPPAA.
Moreover, such a mandate would thwart, rather than promote, deference to
Congress by compelling exhaustion of a remedy the legislature never intended
to provide.

26

Second, because the statute itself provides for the procedures that Republic
challenges, id. Secs. 1381-1461, and the arbitrator is not at liberty to change
these provisions, the determinations which must be made to resolve Republic's
claims are beyond the power of the arbitrator. For example, the arbitrator has
no authority to decide that the statute is inapplicable to employers who
withdrew from the Fund prior to the Act's date of passage, to excuse the
monthly payments that Republic argues constitute a prehearing seizure, to find
that the computation mechanism provided for actuaries is too vague or that the
actuaries have been given their authority on impermissible bases, to alter the
burdens of proof, or to order a jury trial. Administrative autonomy thus
becomes a meaningless concept under these circumstances, because regardless
of the extent of the tribunal's autonomy, the arbitration device cannot provide
the desired remedy. To subject litigants to the processes of an impotent
administrative tribunal would be to undermine public confidence in the
administrative procedures the doctrine seeks to promote. The law should never
command a litigant to perform a useless action. In the context of this case, the
arbitration device can be considered useless unless it meets two prerequisites:
providing an adequate remedy for the litigant or, alternatively, furthering the
goal of judicial economy. Having determined that the remedy is inadequate to
attend the litigant's needs, we must now inquire whether the arbitration

procedure furthers the goal of judicial economy.

27

Although constitutional decisionmaking is traditionally reserved for the

judiciary, the important considerations underlying the factor of judicial
economy acknowledge that the mere allegation of the presence of constitutional
issues does not excuse exhaustion. See Resor, 442 F.2d at 994. Additional
evidence of the administrative tribunal's incapacity either to moot constitutional
issues or to establish a factual matrix for judicial review must be shown before
exhaustion may be excused. See Aircraft & Diesel, 331 U.S. at 767, 67 S.Ct. at
1500; Ashwander, 297 U.S. at 347, 56 S.Ct. at 483 (Brandeis, J., concurring);
Babcock, 610 F.2d at 1137-38. We believe that Republic's facial constitutional
challenge should be considered in light of these evidentiary requirements which
underlie the judicial economy rationale for the exhaustion doctrine. The Fund
and the amicus, acknowledging the importance of these requirements, contend
that arbitration could either moot Republic's claims or result in helpful factfinding. We disagree.

28

We are convinced that arbitration cannot moot Republic's constitutional claims

by deciding the case on nonconstitutional grounds because the claims are
purely constitutional. The only way the issues could be mooted would be if the
arbitrator were to find that Republic owed no money as a result of its
withdrawal from the fund. The statute provides no basis for such a finding.3

29

The most favorable determination that Republic could possibly receive under
MPPAA would be a finding by the arbitrator that a statutory exemption applies.
All the parties agree that the only exemption that could conceivably apply in
this case is the trucking industry exemption, 29 U.S.C. Sec. 1383.4 For several
reasons, we believe that this provision provides no basis for compelling
exhaustion. To satisfy the exemption, Republic would have to show by a
preponderance of evidence that the Fund's determination that the exemption is
inapplicable, evidenced by its failure to account for the exemption in its
computation of Republic's withdrawal liability, was unreasonable or clearly
erroneous. Id. Sec. 1401(a)(3)(A). Given the narrowness of the exemption, it is
virtually impossible for Republic to satisfy this burden of proof. Additionally,
even if Republic could meet its burden, it still would not be absolved of liability
for it would be required to post a bond for 50% of the withdrawal liability
amount for five years which would necessitate the payment of substantial
annual premiums and the posting of security. Id. Sec. 1383(d)(3)(B)(ii). We
conclude, therefore, that arbitration could not possibly moot Republic's
constitutional claims.

30

Furthermore, we believe that arbitration cannot establish a factual matrix which

would assist the court in its later resolution of the constitutional issues
presented. The only fact which the arbitrator can determine is the amount of
Republic's withdrawal liability now due and payable. This fact, alone, would
not be helpful to a court required to rule on the constitutionality of MPPAA.
The factual context necessary for the resolution of these questions cannot be
gleaned from arbitration because the pertinent facts concern the procedures in
the Act itself--facts which are presently available.
C.
31

Thus, because Republic mounts a facial challenge to the constitutionality of

MPPAA and because arbitration could neither moot the constitutional issues
presented by resolving this matter on nonconstitutional grounds nor develop a
factual matrix for the later resolution of the issues by the judiciary, arbitration
does not provide an adequate administrative remedy for Republic's claims, and
it would be futile to compel exhaustion.5

32

In reaching this conclusion, we are cognizant of the peculiar factual scenario

before us. We decide today that arbitration, concededly an administrative
remedy, is not, in the rare posture of this case, adequate for the purposes of the
exhaustion doctrine. If Republic were forced to submit to arbitration at this
point, it would merely undergo a useless exercise which would do no more than
postpone adjudication of its constitutional claims. Such a mandate would not
further the interests of deference to Congress, administrative autonomy, or
judicial economy which form the philosophical underpinnings of the
exhaustion doctrine. Blindly compelling exhaustion where such policy
justifications are absent would be to place the doctrine inside a virtually
impregnable wall--an action which could eventually bring about the weakening
or the demise of the "long-settled rule."

33

Because it is so unusual to have a facial constitutional challenge to legislation

that could not in some way be aided by administrative review, we are confident
that ordering immediate judicial consideration of Republic's constitutional
claims will not dilute the efficacy of the exhaustion doctrine--a fear of many
courts that properly insist upon the application of this important aspect of the
judicial process. See Bethlehem Steel, 669 F.2d at 910; First Jersey, 605 F.2d at
696-97. Because the exhaustion doctrine is inapplicable to this case, we need
not go on to consider whether Republic could employ one of the narrow
exceptions to the doctrine to merit exemption from the exhaustion requirement.

IV.

34

Accordingly, we will reverse the judgment of the district court and remand with
instructions that the district court enjoin the arbitration proceeding pending the
resolution of Republic's constitutional claims. In so instructing, we
acknowledge the intent of Congress, as embodied in Sec. 4221(d) of MPPAA,
to ensure that withdrawal liability payments to pension funds are secured
pending the outcome of the dispute resolution process. Our decision, therefore,
does not relieve Republic of its obligation to either make interim payments to
the Fund or, under the direction of the district court, to otherwise ensure that
such payments will be made to the Fund should litigation be resolved in the
Fund's favor.

Honorable H. Lee Sarokin of the United States District Court for the District of
New Jersey, sitting by designation

Id. Sec. 1381(a), (b). A fund's vested liability is the actuarial present value of
the benefit obligations which have vested. The difference between this figure
and the value of the fund's assets is the unfunded vested benefit liability.
Withdrawal liability is the withdrawing employer's proportional share of the
latter figure. Id. Sec. 1393(c)
The purpose of this withdrawal liability provision is threefold: (1) to remove
incentives for employers to withdraw from financially troubled plans; (2) to
assure new employers contemplating entry into a plan that they will not be
assuming vast obligations incurred by the plan prior to that entry; and (3) to
ensure, in effect, that a withdrawing employer will continue to fund its
proportional share of the plan obligations incurred during its association with
the plan, rather than shift those obligations to the remaining contributing
employers or to the Pension Benefit Guaranty Corporation, the federal insurer
of multiemployer plans. Id. Sec. 1001(a). See Peick v. Pension Benefit
Guaranty Corp., 539 F.Supp. 1025, 1029-34 (N.D.Ill.1982), for an extensive
discussion of the legislative history of MPPAA.

"[This policy justification] is consonant with the underlying rationale for the
ripeness doctrine--'to prevent the courts ... from entangling themselves in
abstract disagreements over administrative policies, and also to protect the
agencies from judicial interference until an administrative decision has been
formalized ....' " A.O. Smith Corp. v. FTC, 530 F.2d 515 (3rd Cir.1976)
(quoting Abbott Laboratories v. Gardner, 387 U.S. 136, 148, 87 S.Ct. 1507,
1515, 18 L.Ed.2d 681 (1967))

The Pension Benefit Guaranty Corporation admits as much in its amicus brief

as it discusses the possible provisions which could mitigate the withdrawal

liability assessed against Republic
Section 1401(d) of the statute provides that "[p]ayments shall be made by the
employer in accordance with the determinations made [by the fund] until the
arbitrator issues a final decision with respect to the determination submitted for
arbitration, with any necessary adjustments in subsequent payments for the
overpayment or underpayment arising out of the decision of the arbitrator."
(emphasis added). This section clearly presupposes that some subsequent
payments will be made, thereby negating the contention that the arbitrator
could find no liability. In addition, there is no provision in MPPAA which
explicitly provides a method of repayment whereby all installment payments
will be returned to the employer upon a finding of zero withdrawal liability of
the arbitrator.
4

The trucking industry exception permits an employer to withdraw from a

multiemployer plan without incurring liability if: (1) substantially all
contributors to the plan are engaged in the long and short haul trucking
industry, the household goods moving industry, or the public warehousing
industry; (2) the employer either permanently ceases to have an obligation to
contribute under the plan or permanently ceases all covered operations under
the plan; and (3) either the Pension Benefit Guaranty Corporation determines,
within five years after such cessation, that the plan has not suffered substantial
damage to its contribution base as a result of such cessation or the employer
furnishes a suitable escrow account or bond in an amount equal to 50% of the
employer's withdrawal liability

Such a conclusion is consistent with the decisions of other courts that have
already ruled on the constitutionality of MPPAA. See Shelter Framing Corp. v.
Carpenters Pension Trust, 543 F.Supp. 1234, 1241 (C.D.Cal.1982) ("[t]o make
these plaintiffs go through the ... process of arbitration ... is simply unfair when
[it] could not adjudicate their principal grievance which is that the whole basic
statute is unconstitutional"); Peick, 539 F.Supp. 1025, 1038 (N.D.Ill.1982) (on
ripeness grounds, court held that although the "lack of a factual record and the
possibility of an exemption might indicate a lack of ripeness if plaintiffs were
challenging MPPAA as applied, they were bringing a facial challenge to the
statute and ... [accordingly, the aforesaid] factors present[ed] no bar to their
action")